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Clean Energy Fuels Corp. Message Board

  • richardleeds richardleeds Oct 5, 2012 4:58 PM Flag

    the problem I see with CLNE

    I was in the retail business of selling fuel. I owned an independent Shell station in California. One of my childhood best friend's father owned 20 stations selling fuel. The problem with selling fuel to vehicles is the profit margins are not very good.

    The big money is made by the actual producer: Shell, Exxon, Chevron, Devon, Apache, etc.

    Take a look at any of the truck stop operations or retail gas/diesel stations and look at the profits and profit margins. Once you buy the fuel from a refinery who bought the fuel from a producer, the big profits have been made and the final transaction in the chain has very small margins left.

    I do not see that CLNE is going to make any significant money. They have not to date, I do not see it 2013, and how little will the profits be in 2014 and 2015.

    The big money is going to be made by the producers when trucks start using natural gas in a big way and that is still 2-3 years away. The final link in the chain of distribution does not make the real money.

    Having 300 stations selling a couple of pumps of natural gas at each station is not going to cut it. The newsletter hype on CLNE and the growth of natural gas is not realistic. You want to make the real money in natural gas, do not sell it to the consumer at 300 Clean Energy fueling stations. Take a look at 300 truck stops that currently sell diesel and you will see how little they make and how little growth they have selling diesel fuel to trucks each year.

    The big profits in fuel do not go to the pump transaction, that is why CLNE does not make much money at any one location. Trucks are big, you only fill one at a time whereas three cars at a time can fill up at a typical station spot.

    Wake up, there is no documentation out there that CLNE will have any significant profits over the next few years or anything different from the current truck stop equities in the country at this time.

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    • Why are you here?

      Sentiment: Buy

    • CLNE makes its own LNG, that is a value added business that is not very mainstream in the US. Considering that the Natural Gas Highway will be LNG fueled I would say that element of their business is quite proprietary. Also CLNE never expects to make any more money on retail CNG stations than any of the majors do selling gasoline. they are a fleet business. fleet says, CLNE, build us a station and maintain it! that's where the money comes from. so it's not comparable to retail gasoline stations.

    • Thanks for the insight. Maybe FCG is the answer.

    • The eventual picture for CLNE is XOM or CVX buys them out.Thats where the money is.

      Sentiment: Strong Buy

      • 2 Replies to insurancefla1
      • CLNE owns very few locations, they are actually installing tanks and pumps at various truck stops in return for sharing revenue.

        XOM and CVX do not need to purchase CLNE because they do not need retail locations. The real money I keep pointing out is not being the final seller of fuel to the final consumer. The real money is in production, just look at the stock value of CLNE vs XOM and CVX over the last two years.

        XOM and CVX do not need to pay a premium for a company that does not make much money. XOM and CVX can pay GE $250,000 for a self contained tank, pump operation that they can place at any station that has room.

        What CLNE is doing is building out a cross country network of pumps along freeways but they are doing that at truck stops owned by other companies and so CLNE does not own the land at these locations. What is there for XOM and CVX to buy? Retail, final link in the distribution to the consumer does not have the margins that XOM and CVX can achieve.

        Station locations are not significantly profitable and neither is the distribution set up for sale to taxi fleets or government fleets. It is a volume business with very small margins. Why do you think CLNE does not make money during any quarter in 2012. What makes you think it will be any different in 2013?

      • Exxon and Chevron do not need to buy out a company that does not make money for 300 locations. CLNE does not make money on any of its businesses. Exxon and Chevron will be able to buy pumps from GE and others and install them at their station locations. The various truck stop locations is a different matter. Exxon and Chevron do not have to buy them either, they just sell them the fuel which is the real money.

        Owning stations is not very profitable. Ask any gas station owner in California.

 
CLNE
5.80-0.41(-6.60%)Jun 29 4:00 PMEDT